In August this year, employment in agriculture fell by 8.7 million, shrinking India’s employment, in absolute terms, by 1.9 million to 397.8 million in August from 399.7 million in July.
Excess agricultural workers are getting into less-privileged, less-wage employment as maids, cooks or security guards, failing to find their usual way, during this time around of the year, into the construction and manufacturing sectors, Centre for Monitoring Indian Economy (CMIE) said.
“Excess or seasonal labour released from agriculture usually finds its way to construction sites. In better times, this is part of the transition from farms to factories. But, the construction industry itself shed over half million jobs in August. And, manufacturing also shed nearly a million jobs. In the circumstances, labour seems to have found employment in the household sector as maids, cooks, gardeners, security guards and the likes, a transition that could be described as from farms to the kitchen-sink instead of farms to factories,” wrote CMIE’s MD & CEO Mahesh Vyas, in a recent article.
In the post-sowing season around this time of the year, excess labour in agriculture is not a new phenomenon. It is rather seasonal in nature. According to CMIE, employment in agriculture had averaged 124 million during the kharif crop sowing months of May, June and July. In August it fell to 116 million.
In August this year, employment in agriculture fell by 8.7 million, shrinking India’s employment, in absolute terms, by 1.9 million to 397.8 million in August from 399.7 million in July. This spiked India’s joblessness rate to 8.3% in August from 7% in July and dropped overall employment rate to 37.2% from 37.4% a month ago.
“The composition of this fall in employment in August reveals the challenges India faces in providing jobs. The loss was essentially in farm jobs. Non-farm jobs increased to absorb a very large proportion of the jobs shed in the farm sector to leave a net deficit of 1.9 million jobs. However, the non-farm jobs that expanded were mostly not the kind that could be considered as good quality jobs,” Vyas wrote.
During the month, non-farm jobs increased by 6.8 million. Of these, employment in the form of business persons increased by nearly 4 million and those in the form of small traders and daily wage labourers increased by 2.1 million. Salaried jobs increased marginally, by 0.7 million, during the month, he wrote.
Much of the labour shed by agriculture was absorbed in the services sectors which provided 8.5 million additional jobs in August. The big absorbers of employment within the services sector in August were personal non-professional services and retail trade. Non-professional service providers include house-maids, home cooks, beauticians, masseurs, gymnasium trainers, barbers, plumbers, gardeners, security guards, handy-men and similar service providers. The increase in such jobs in August was a significant 4.7 million.
Industry could not absorb any. On the contrary, the industrial sector shed jobs in the month. Employment in the industrial sector in August 2021 was 2.5 million less than it was in July 2021.
The manufacturing sector shed 0.94 million jobs in August. Factories, it seems, are not a reliable source of employment. They seem to have permanently lost about 10 million jobs in the pandemic-induced lockdowns, Vyas said.